The Franklin LibertyQ Emerging Markets ETF (FLQE) tracks an index of stocks from emerging markets countries based on quality, value, momentum, and low volatility. The index tilts more heavily toward quality and value, with a lesser emphasis on momentum and low-vol.
Investors should note that, as of June 2020, FLQE includes South Korea, which some other funds lump in with developed markets. Unsuspecting investors who mix and match funds from different firms may find themselves either unintentionally overweight South Korea or missing out on that country entirely.
FLQE is reasonably priced for a smart-beta approach to emerging markets, though it’s still more expensive than ultra-low-cost plain vanilla rivals like the iShares Core MSCI Emerging Markets ETF (IEMG) and the Vanguard FTSE Emerging Markets ETF (VWO), which lack fancy factors but offer similar exposure and great liquidity at a fraction of the price. There’s also competition to consider in the multi-factor space, including funds that have attracted more assets and daily trading, like the Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM), the PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (MFEM), and the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM).